APT (ASX) Global competitors and barriers to entry

Originally posted by CrowdedTrade ↑

Yes with rapid growth in customers there is a commensurate growth in revenue from late fees and, with this, increasing scrutiny by regulators (and interest by reporters as in the weekend article below).

https://www.msn.com/en-au/money/com...aw-reform/ar-BBMlM0v?ocid=spartanntp[/BCOLOR]

However, we are talking about a small percentage of users paying fees and these fees are capped. Furthermore, while the total revenue from fees is growing, the proportion of overdue payments has declined. In terms of risk - late fees do represent about 25% of revenue, so if reduced, could potentially have a material impact on earnings. However the fees provide additional incentive to customers to make payments on time. Being "really, really" customer friendly APT might offer to waive late fees to encourage a final payment (and I recall Nick Molnar mentioning this) but, if regulations were expanded to cover 'buy now pay later' would regulators having a major issue with the fee structure? It seems a very fair arrangement to me and, given the size of payments/fees involved, I can't see why this form of 'lending' would be of major concern to ASIC. However I'm not ASIC so I would be happy to hear people's views.

Given that Afterpay do report non-payments it is not as if lenders can't access and assess this component of an individual's credit history. The recent article (above) mentions the Consumer Action Law Centre and their concern about Afterpay's credit checks not being thorough. However, as an advocate for vulnerable and disadvantaged I would think that the Consumer Action Law Centre should (as their website suggests) be more interested in lobbying against high interest rates charged by payday lenders etc.

https://consumeraction.org.au/lobbyists-beat-the-battlers-on-payday-loans-and-rent-to-buy/

The growing Afterpay's customer base, 94% of who make payments on time, value the service. Given that these customers represent a significant proportion of the voting public I can't see too much political pressure being generated to clamp down on 'buy now pay later'. The risk that I see is to short term sentiment as a result of such articles as the ABC one (above) ....and we saw that a few months ago with the "Mickey Mouse" story. In hindsight this turned out to be an excellent buying opportunity.

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I'm not worried about regulating the product, Australia can't hold down a prime minister long enough to get anything done.

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